Politicians are obsessed with ‘narrative’. Modern government deals with a bewilderingly diverse range of policy problems: from declining bee populations, to NHS waiting lists, to aircraft carrier procurement. Boiling this down to a simple, salient, doorstep-ready narrative is the difficult task of pre-election politics.
But what starts as an attempt to clarify and simplify often comes to do precisely the opposite. As policy-reviewers and ministers attempt to stay on message, policies are developed to fit the narrative, rather than the other way round. Policy ideas that do not fit into the dominant narrative are awkwardly levered into it regardless.
The ‘big society’ started as a clearly defined and interesting idea about how to mobilise civil society to achieve things which the state is not particularly good at. By the early days of the coalition government however, the term had been tortured to the point that it was applied to the outsourcing of public services to profit making firms. Slowly the narrative came to obscure rather than simplify the policies it was intended to illuminate. Some people even argued that bees could be saved by the ‘big society’. Thankfully ministers stopped short of empowering community groups to develop our next aircraft carrier.
Labour’s narrative around creating a better capitalism faces all the same risks. As the eight major policy reviews are announced, and policy recommendations framed around creating more inclusive prosperity begin to stack up, there is a risk that the big ideas get lost among the padding.
On the demand side, Ed Mayo’s work on empowering consumers is particularly powerful. Michael Young, author of the 1945 Labour manifesto, realised long ago the importance of empowering people in their role as consumers was just as important as empowering them in the workplace. He went on to create the Consumers’ Association and Which? in order to do just that. This important strand of Labour thought has too often been overlooked since then.
On the supply side, Labour’s comfort zone, there is no shortage of proposals designed to combat short-termism, low pay, the debilitating insecurity caused by zero-hours contracts, or the skills gap. Andrew Adonis’ work provides a coherent and radical agenda, but many of the other policy documents rely on clumsy targets or incentives that are likely to be marginally influential, at best.
There is one idea in particular however, that could genuinely change the way our economic system works. Indeed, this idea is so powerful it is capable of tackling every one of the problems outlined above, all at once.
This week I was at the offices of Triton Global, an insurance services firm based in the City of London, which has decided to make every single one of its employees an owner of the business. Starting today, as well as being given shares in the company, they will also be given a say in how the business is run.
It is not hard to see why Triton made the jump to employee ownership. There is now a good evidence base showing that employee-owned firms are more productive, more resilient during recessions, and have the innovative edge on regular firms. Crucially, employee owners also have higher job satisfaction and higher income than they would in a regular firm. Charlie Mayfield, chair of the John Lewis partnership, spoke passionately about how they were able to retain their staff effectively (who would leave when you get paid a whopping 15 per cent bonus every year?) and how this allowed them to confidently invest in the training and expertise of their staff. After the event I heard an enthusiastic guest describing employee ownership as a ‘win-win’. That sounds like an understatement.
If it is such a good idea, why has employee ownership not yet gained much traction in the United Kingdom up until now? In the post-war period the British left has been lukewarm on employee ownership. Many unions oppose it on for the same reasons that they initially opposed the minimum wage – is not traditional collective bargaining. Indeed, the coalition have probably done more for employee ownership than any national Labour government.
The other reason it has never taken off in the UK is because there has been a lack of policy knowledge about how to spread employee ownership. But a new Centre for London report helps to fill this gap in policy thinking. It analyses the development of three notable clusters of employee ownership – two in Europe and one in America – and outlines a new strategy for spreading employee ownership from firm to firm. While much of this work will be done outside of government, along the lines of the living wage campaign, there is also an important role for central government to play.
The last contribution to the discussion at the Triton event this week came from an employee (now employee-owner) of the company: ‘Twenty years ago I was growing up in single-parent family in south Wales. If you had told me then that two decades on that I would be a partner in a multi-national insurance firm, I simply would not have believed you.’
Employee ownership is the single biggest idea for creating a more inclusive capitalism. We must not let it get lost in the noise.
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Sam Sims is a policy researcher working in Westminster. He writes here in a personal capacity and tweets at @sam_sims_
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Photo: Walt Jabsco